fabtech 2014 - leading your organization to profitability using a manufacturing execution (mes)...

FABTECH ATLANTA 2014

Leading Your Organization

Leading Your Organization to Profitability Using

a Manufacturing Execution System (MES)

Mike LeRoy

www.paperlessllc.com

262-354-3220


Mike LeRoy

30+ years background in manufacturing

technologies including Manufacturing

Execution Systems (MES), Enterprise

Resource Planning (ERP)

Software Developer and Management

Sales and Sales Management

President of Paper-Less, LLC


What is MES?

MES stands for ….

Manufacturing Execution System

MOM, CPM, POM……


What is MES?

Is a Data Collection system an MES system?

MES - Data collection oriented

ERP Centric

Machine Centric

MES - Process oriented

Oriented toward procedures and

processes

And, they collect data

Sometimes from machines, others from people


What is MES?

Is a Data Collection system an MES system?

MES - Data collection oriented

ERP Centric

Machine Centric

MES - Process oriented

Oriented toward procedures and

processes

And, they collect data

Sometimes from machines, others from people

Top DownBottom

Up Inside

Out


MES Types

ERP Centric

Machine Centric

Process/Procedure Centric


ERP Centric

Attendance Recording Labor Reporting Operation Statuses Job Starts and Stops Inventory Issuance and Consumption Operation Step / Order Completion


Machine Centric MES

Machine Performance Speeds and Feeds Statuses and conditions Environmental Downtime Setup and adjustment times Performance KPIs and Dashboards


Procedure Centric

Scheduling

Work Assignment

Shop Packets

Material Movement

Kanban Management

Barcoding

Quality Control

And more…….


MES Types vs Manufacturing Types

High Volume /

Long Runs /

Repetitive

Low Volume / Short

Runs / Batch

Procedure Centric

/ ERP CentricMachine

CentricMES

MFG

Greater

Variability

Less

Variability

.


Expectations/Results

Engineering

Maintenance

Manufacturing

Customer

Service

MES

Accounting/IT


Typical Orientation - ERP

Accounting/ITEngineering

Maintenance

Manufacturing

Customer

Service

ERP

Centric


Typical Orientation - Machine

Engineering

Maintenance

Manufacturing

Customer

Service

Machine

Centric

Accounting/IT


Typical Orientation - Procedure

Engineering

Maintenance

Manufacturing

Customer

Service

Procedure

Centric

Accounting/IT


Issues

Divergent systems Single purpose solutions Many disparate systems and databases

emerge over time End users have disjointed experiences with

software Redundant data entry and duplication of

efforts Non-value add activity Workflows are not consistent and

synchronized


Why Implement an MES?



• You can’t manage a process until you can measure it,,,,,, and,

• You can’t measure it until you collect relevant data.

• You certainly can’t improve it until it can be measured.


Move

Tickets

Material

Picking

Serial

Tracking

Labor

Reporting

Productio

n

Reporting

Electronic

Shop

Packet

Electronic

Routing

Job

Schedulin

g

Time &

Attendanc

e

Manu-

facturing

Receipts

Purchase

Receipts

Material

Tracking

Electronic

Kanban

Testing &

NCRMachine

Statuses




• Reducing reporting latency / Increasing

visibility into production

• Getting accurate information into the

hands of those who can impact change

• Interface with ERP

• Improve communications across the

enterprise/gain insight to production status



• Improve on-time delivery performance

• Providing manufacturing the tools they

need to operate day to day

• Establishing a foundation for continuous

improvement

• Enhance plant floor processes

All of which help to increase efficiency

and reduce costs.


Why Implement MES?

Communicate

Requirements

Support Execution

Manage Results

Continuously Improve


What to choose?

This is not a one size fits all. +

Understand your goals

Have a vision for the future

Define your requirements

Unite the parties affected by the vision

Educate yourself on these system types


MES Types vs Manufacturing Types

High Volume /

Long Runs /

Repetitive

Low Volume / Short

Runs / Batch

Procedure Centric

/ ERP CentricMachine

CentricMES

MFG

Greater

Variability

Less

Variability

-


Difficulties as a Sponsor of MES

• Business requirements are not effectively defined

• Not realizing the reach of a comprehensive MES system

• Source of the sponsorship

• The solution can be bigger than the immediate problem being solved

• Sponsors are not effectively prepared with ROI and TCO analysis presented• Include all aspects of costs


Establishing ROI

Tangible and intangible ROI


Tangible ROI

Savings in Production Expediting

Preparing the shop packet/traveler

Communicating changes / redistributing or updating

the shop packet

Production time lost to material handling logistics

Savings in Scheduling

Sequencing and communicating job priorities

Labor Reporting

Preparation, distribution and collection of labor cards

Recording labor/production activity

Errors in recording and correction time

Data entry and delays in recording


Tangible ROI

Rework – Internal and external Additional costs

Labor

Material

Administration and tracking

Reductions in scrap Material and labor cost savings

Overhead with managing scrap

Redundancy in data recording

Compliance with government or customer demands Late delivery fines, improper labeling, wrong

products…..


Intangible ROI Impact of lack of visibility into production status Compromised customer satisfaction

Delayed answers to customer inquiries Missed delivery dates

Costs are too high/prices are not competitive/jobs sold at loss

Inconsistent procedures from line to line or plant to plant

Impact of delayed reporting Employee morale, attitude, job satisfaction,

empowerment Enabling business growth Increased customer satisfaction Customer retention


MES Claims for ROIDescription Benefit

realized

within 12

months

Reducing Reporting Latency 78%

Regulatory Compliance 65%

Improving Quality 80%

Standard Process Enforcement 74%

Improve employee decision making

and competency

73%

IT Modernization 72%

Reducing Cycle/Lead Times 67%


Description Benefit realized

within 12

months

Increasing Asset Utilization 69%

Improved inventory and cash

flow

55%

Improving Unit Margin 55%

Reducing Direct Labor Costs 57%

Expanded Markets/Segments 50%

Customer Retention/growth 31%

Improved Market Share 25%

MES Claims for ROI


Key ROI Calculations


Key ROI Calculations

ROI = Gain from the Investment – Cost of the

investment

Cost of the Investment

Payback = Cost of a Project

Periodic Cost Savings


Other Relevant Calculations

Future Value

Present Value

Weighted Average Cost of

Capital

Net Present Value

Internal Rate of Return


Do your homework

• Understand the business case and

business requirements

• Interview representatives from all areas

affected to discover value

• Thoroughly understand the current and

future state

• Value the impact the future state will

have on material, machine and people

cost


Do your homework

• Set conservative and optimistic ROI

scenarios

• Consider the ancillary impacts

• Be thorough – Include everything

• Be a champion for your project


Resources

• MESA International (Manufacturing Enterprise

Solutions Association)

• Manufacturing Leadership Council

• Frost & Sullivan

• Gartner

• IDC

• LNS

• MES- Manufacturing Execution Systems

LinkedIn Group


Thank

You

Mike LeRoy

www.paperlessllc.com

262-354-3220

fabtech 2014 - leading your organization to profitability using a manufacturing execution (mes)...

Software

machine oriented mes

mes aids

people fabtech atlanta

dashboards fabtech atlanta

pom fabtech atlanta

llc fabtech atlanta

data collection system

type of mes solution